Freddie Mac stood up McCain adviser

Sunday

Sep 28, 2008 at 12:01 AMSep 28, 2008 at 12:43 PM

WASHINGTON -- Last March, a consultant to Freddie Mac arranged a meeting between the top economist in John McCain's campaign and Hollis S. McLoughlin, a prominent Republican and top executive at the failing housing giant that is central to the nation's credit crisis.

WASHINGTON -- Last March, a consultant to Freddie Mac arranged a meeting between the top economist in John McCain's campaign and Hollis S. McLoughlin, a prominent Republican and top executive at the failing housing giant that is central to the nation's credit crisis.

The meeting with economic adviser Douglas Holtz-Eakin never took place because several Freddie Mac executives objected, said three people familiar with the episode.

The executives pointed out to McLoughlin that there was no such outreach to the campaigns of Democratic candidates, said the three people, who spoke on condition of anonymity.

The consultant who arranged the meeting, Harry Clark, is the founder of a Washington lobbying firm.

Out of a special account that McLoughlin controls, the Freddie Mac executive has been paying Clark more than $10,000 a month. McLoughlin has been using the same account to pay $15,000 a month to the lobbying firm of Rick Davis, McCain's campaign manager, the three people said.

The payments have been made despite a scaling back of Freddie Mac's government-relations budget. The budget-cutting began several years ago after serious accounting problems at Freddie Mac tarnished its public image.

"Hollis protected Harry Clark and Rick Davis by intentionally moving their contracts into an account that Hollis controlled and had to review and approve," said one of the sources.

Freddie Mac and Fannie Mae, the other failing mortgage giant, paid Davis or his lobbying firm more than $2 million dating back to 2000.

Freddie Mac and Fannie Mae were placed into government conservatorship this month because of their precarious financial condition.

McLoughlin has survived a sweeping set of management changes at Freddie Mac.

The reason for the meeting was that "Hollis thought McCain would likely win the election and Hollis wanted to begin making the case for Freddie Mac's continued existence as early as possible," said the third person with knowledge of the planned meeting.

Yesterday, McCain campaign spokesman Brian Rogers said that "if the meeting was set up, it was just one of a series of meetings" that Holtz-Eakin does with a range of people.

Rogers said Holtz-Eakin has a record of being a critic of Freddie Mac and Fannie Mae.